Technical Articles – MGT301

Theme # 3: Organization and Marketing Strategy

After studying environmental analysis, in the current theme we would discuss about Organization
and marketing strategy.

Marketing is all about serving customers profitably. Marketing is surrounded by environment

which has actors, factors and forces that affect marketing positively or negatively. Environment
remains the same but organization has to deal with its environment. Marketing strategy is basically
response of marketing to its environment.

Strategic planning is done at broad level in any organization. However, Strategic planning is
known as the process to develop and maintain strategic fit between organizational capabilities and
goals in a dynamic marketing environment. Goals can be to be no.1, to grow etc, capabilities can
be some resources or skills that an organizational can have.

As individual is affected by its environmental changes and get dressed according to weather,
similarly organizational environment has an effect on the organization and marketing specifically.
Parts of strategic planning are:
1. Environment analysis
2. Internal analysis
3. Vision
4. Mission
5. Objectives

Environment means what surrounds organization/ market. Environmental analysis is the process
of studying actors, factors and forces outside marketing to map challenges and opportunities.
Actors---------e.g supplier, distributors etc.
Factors____ public
Forces______e.g economic, political forces
So all these are outside market and we need to analyze them. There are several tools for
environmental analysis.

PESTEL/STEPEL

 Political
 Economic
 Social
 Technological
 Ecological
 Legal

As a result of environmental analysis we can come up with several opportunities and challenges.
Internal analysis is a process of studying actors, factors and forces inside organization to map
strengths and weaknesses. These actors’ factors and forces can be resources, technology,
machinery, location, brand or any other thing that can give organization as strength vice versa for
weaknesses.
There are several tools of internal analysis but for the scope of this course we would study Portfolio
Analysis only.

Portfolio means basket of products and services that are offered. In portfolio analysis the products
and businesses are the evaluated by the management of the organization, and this activity has a
essential role in strategic planning.
Usually in marketing we follow the trend that which products are our strengths and which are
weaknesses.

Result of internal analysis

 Strengths
 Weaknesses
Once an organization has done its strategic analysis about its external environment and about its
internal strengths and weaknesses then it has to be sure about its vision.
Vision gives long term direction, what it wants to be in long term. Forward sports is a Pakistan
based manufacturing company that makes soccer balls for international football games, its vision
is: “Translating marketing and business goals into design strategy, novelty and to attain a new
product success.”

Millat tractors Vision is:

“Millat to be a global group of companies, recognized for a range of quality products with
innovative design capabilities.”

Through vision we get direction, after that, organizations have a mission to achieve its vision.

Mission: Organization’s purpose; what is wants to accomplish in the larger environment, and the
business organization is in.

Examples: Forward sports: “Aiming to work with coherence of renowned global brands,
organizations and entrepreneurs”.
Adidas: “to be the best sports company in the world”.

We should always have mission in terms of customers/ customer needs rather than in terms of
products. For example we are not selling mobile phone we are selling way of communication.
After setting missions we need to set objectives. Objectives are what an organization wishes to
achieve precisely. Such as increasing market share, offering new outlets, more customer
satisfaction. Objectives/targets and goals are used as same meaning over here. Sometimes in theory
Goals are broader objectives and targets are more specific.

As discussed earlier business portfolio is the assortment of businesses and products that make up
an organization. For example, a company making all household items e.g. hand soap, detergent,
tea whitener and everything else. All these items would be its portfolio.
Strategic Business Unit (SBU) is known as the unit of any organization that has a separate
planning as compare to other businesses of the company/organization with separate mission and
objectives.
Some products are so important that you have to have separate mission and objectives. BCG
matrix is a tool for portfolio analysis. It is done on the scale of relative market share and market
growth rate.

Star: This Quadrant has High growth rate with High market share.
Question mark: This Quadrant has high growth rate with low market share
Cash cow: This Quadrant has Low growth rate with high market share
Dog: This Quadrant has low growth rate with low market share.

If portfolio has a balance of all these products it can cope with changing environment.

Source: Kotler, P., & Armstrong, G. (2010). Principles of Marketing, 10th Edition.
Product/ market expansion Grid is a tool for identifying company growth opportunities through
market penetration, market development, product development or diversification.

Market penetration: Means existing products in existing markets. These products require more
promotion.

Product development: New product in existing market. You get more growth with more revenue.

Market development: Existing products in new markets. E.g same product in new geographical
area.

Diversification: New product in new market.

Source: Kotler, P., & Armstrong, G. (2010). Principles of Marketing, 10th Edition.

What we deliver to customers and what we get in return both are values. Products / services that
are offered to customers are the result of any need. Value chain is a chain of different departments
that perform value producing activities such as design of a product, producing of a product,
marketing of a products and delivery of a products, and finally to provide the support services to
a company.
Value delivery network consists of company, suppliers, distributors and customers who work
together to improve performance of the entire system. Suppliers deliver value to company then
they deliver to distributor who ultimately deliver to end consumers. Companies not only invest in
themselves but they also invest in their suppliers and distributors. If any of these fail to deliver,
company will not be able to deliver value to its customers. A single organization cannot fulfil
needs of the society and cannot fulfil needs in the same manner market can be divided into different
segments.

Market segmentation is the process of dividing market into different group of buyers with
different characteristics, attributes, and needs. These buyers need distinct products or marketing
mixes. Segmentation can be done on the basis of gender, location, age etc. People in a similar
segment have similar needs and characteristics for which separate products and marketing mix is
required. After segmentation is done targeting is done. It is not always possible for companies to
target every segment that they have made. Market targeting is the process to evaluate the
attractiveness of each market segment in order to take the decision to enter in that segment or to
target that segment.

Market positioning is a process to create a unique and distinct place of a product as compare to
competitor’s products in the minds of target consumer. For example, some tooth pastes are famous
for its cavity protection, and some for whitening. This is positioning.
Marketing mix is developed after segmentation, targeting and positioning are done.

Marketing mix consists of marketing tools such as products, price, place and promotion. The
combination of these four factors are controlled by a company to influence its customers to
purchase its products.

These are actually 4 Ps of marketing mix. When we talk about products we talk about its quality,
design, packaging etc. Price includes listed prices, available discounts, payment methods etc. In
promotion we discuss advertising, personal selling, sales promotion and public relations. Place
deals with channels, locations, inventory, transportation and logistics related methods.
Customer is the core of marketing activities. In external environment there are marketing
intermediaries, competitors, suppliers and publics. Market analysis, planning, implementation and
control is done. 4 Ps are developed for the product. As explained earlier, Market is divided into
segments and then appropriate segment is targetted and positioned.

Marketing ROI
In simple words, a company spends a handsome amount on marketing activities and expect to have
a good return on this investment. It has different methods to calculate marketing return on
investment but generally the net return is divided by costs of marketing investment.
For building marketing strategy we need to do SWOT analysis as well.
S Strengths – It shows internal capabilities of the company to reach its objectives
W Weaknesses- It shows internal limitations of the company that creates hindrance for a company
to achieve its objectives
O Opportunities – It shows how a company can take advantages of opportunities available
externally
T Threats- It shows how factors may challenge a company’s performance
………………………………………………………………………………………………………

GENERALLY ASKED QUESTIONS

Question 1: What is the difference between customer and consumer?

Answer: A customer is a person who purchases something from the market. While a consumer is
a person who consumes that thing. For example, you purchase candies for your children. Here,
you are a customer and your children are consumers.

Question 2: What is PESTEL analysis?

Answer: PESTEL stands for Political, Economic, Social, Technological, Environmental, and
Legal factors. It is also known as PEST analysis. An organization does the PESTEL by evaluating
all these factors and their impact on the business. For example, in political factors, a business must
evaluate the factors like government policy, political stability or instability in overseas markets,
foreign trade policy, tax policy, labor law, environmental law, trade restrictions, and so on.

Question 3: What is basic difference between suppliers and distributers according to

marketing?

Answer: A supplier can be a person who provides the products or goods to the consumers, usually
with the help of distributors. A supplier could be a manufacturer. Whereas, a distributor is the one
who distributes the goods directly to the wholesalers and retailers. You can say a distributor is an
intermediary between the manufacturer and consumers.

Question 4: What is the difference between political and social-ecological?

Answer: In marketing, political analysis focuses on the interrelationships among individuals,

governments, and public policy whereas a social-ecological system consists of 'a bio geophysical
unit and its associated social actors and institutions. It includes the study related to social values
and welfare.